Ms Gillard - who had previously talked of putting a centre in East Timor - would not be drawn on the issue.

"What I would say is when the government's in the position to make an announcement about what has arisen, then we'll announce it and then people will have a full opportunity to analyse it," she said.

Opposition leader Tony Abbott said that the move was vindication of the Howard government's policy.

"On its own Manus Island won't stop the boats and it won't end the protests," he said.

"And I think it is incumbent on the government to explain how something that was supposed to be an affront to human rights when John Howard did it is now necessary to protect our borders."

But refugee advocate David Manne said the move would mean "vulnerable people seeking our help are essentially cast into indefinite exile".

Amnesty International called it a retrograde step.

"This was a failed policy that was internationally condemned for breaching the human rights of some of the world's most vulnerable people," said the group's refugee spokesman Dr Graham Thom.

"It would appear that this is a clear attempt by the government to remove people from the oversight of the Australian courts, with the serious consequence that people in genuine need of protection may be rejected and sent back to where their lives may be at risk."

Australia's immigration detention system has come under increased pressure in recent months, with growing numbers of asylum seekers from Sri Lanka, Afghanistan and Iraq arriving by boat.

Detainees unhappy with their treatment have rioted at both the Christmas Island and Villawood detention centres.

The government has already announced the provision of 1,900 more beds on the Australian mainland to accommodate new arrivals.